Budget day commercial property sales fetch 2% tax

All commercial property sales signed before midnight on budget day will be liable for the lower 2% stamp duty rate, the Finance Bill has confirmed.

Medical card holders whose income does not exceed €60,000 will remain exempt from the univeral social charge until the end of 2019 as a result of the bill published yesterday. The measures extends the arrangement by two years.

The bill contains 78 sections, the majority of which implement the changes announced on budget day together with a number of small amendments including the U-turn on stamp duty for farmers.

The bill, as expected, provides for the Government’s move to increase the rate of stamp duty on commercial property transactions from 2% to 6%. It states the old rate will apply to all transactions for non-residential properties signed prior to October 12.

The hike on commercial stamp duty has raised concerns as industry lobby groups have warned Finance Minister Paschal Donohoe will struggle to achieve its projected €376m yield on the new 6% rate.

The industry says the projections are based on the volume of business conducted in 2016 and have suggested that will not be repeated.

As expected, Mr Donohoe reversed the steep increase in stamp duty for non-residential land for a small group of farmers inheriting land from family members, amid strong concerns from within Fine Gael and from farm lobby groups.

In last week’s budget, Mr Donohoe announced that non-residential stamp duty was to increase from 2% to 6% with immediate effect.

Qualified farmers aged under 35, as well as those inheriting land from relatives aged 67 or younger, already receive exemptions or concessions on the tax.

The difficulty has been caused for farmers who are not under 35 and are receiving a farm transfer from a relative aged over 67. Until last week, they paid stamp duty of 2% but under the change announced by M r Donohoe they would have been liable for a duty of 6%.

The Finance Bill, which gives legal effect to the various taxation measures announced in the budget, provides for the increase in the excise duty on cigarettes by 50c as well as the introduction of a tax on sugar-sweetened drinks.

The bill also contains details of the tapered extension to the mortgage interest relief as well as the proposed hike in the vacant site tax to 7%.

Tech start-ups and other small businesses will be allowed to offer tax-efficient stock to attract staff under new measures in the bill.

Details of the Government’s Key Employee Engagement Programme mean employees are currently liable to income tax, USC and PRSI when exercising their share options.

However, under the Government’s new scheme, they will now only be liable for capital gains tax at a rate of 33% upon the sale of their shares.

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